Assessee gets section 54F deduction for multiple residential units received through joint development agreement

ITAT Bangalore allowed assessee's claim for deduction u/s 54F for multiple residential units received through JDA. AO had disallowed deduction for 14 apartment units, permitting benefit only for one unit. ITAT held that prior to Finance Act 2014 amendment effective 01.04.2015, section 54F permitted deduction for multiple units. Relying on Karnataka HC ruling in Rukminiamma case, tribunal found the word "a" in "residential house" should not be construed as "single" but as indefinite article permitting plural interpretation under General Clauses Act. Assessee entitled to full deduction benefit.

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Issues Involved:
The judgment involves the interpretation of deduction under section 54F of the Income Tax Act, 1961 for multiple residential units received by the assessee under a Joint Development Agreement (JDA) and the impact of relevant judicial pronouncements on the issue.

Issue 1: Denial of Deduction under Section 54F:
The appeal by the Revenue challenges the order of CIT(A) directing the grant of deduction under section 54F of the Act for 15 apartment units received by the assessee under a JDA with NCC for the Assessment Year 2008-09. The AO disallowed the deduction for 14 apartment units, interpreting the provision to allow benefit on only one residential unit. The CIT(A) allowed the appeal based on various judgments supporting the assessee's claim.

Judgment Details for Issue 1:
The Tribunal considered the contention that prior to the amendment to section 54/54F of the Act in 2015, the assessee's claim was supported by judicial pronouncements. The Hon'ble jurisdictional High Court had interpreted "a residential house" in section 54 to include plural units, not limited to a single house. The Tribunal noted that the subsequent amendment in 2015 restricted the benefit to one residential house, but it was held to be prospective. Citing relevant case laws, the Tribunal upheld the assessee's entitlement to deduction under section 54F for all units received under the JDA, as the relevant Assessment Year predated the amendment.

Key Legal Interpretations:
- The term "a residential house" was construed to include plural units based on judicial precedents.
- The subsequent amendment in 2015 aimed to restrict the benefit to one house prospectively.
- The principle underlying the decisions of High Courts was considered binding as precedent.
- The Madras High Court affirmed the application of principles from section 54 to section 54F of the Act.

Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming the assessee's entitlement to deduction under section 54F for all units received under the JDA for the Assessment Year 2008-09. The judgment aligned with the interpretation of the term "a residential house" as per relevant judicial pronouncements prior to the 2015 amendment.

This summary provides a detailed breakdown of the legal judgment, highlighting the issues involved and the comprehensive details of the Tribunal's decision on the denial of deduction under section 54F of the Income Tax Act.

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